CCM CCM Ethics and Whistleblower Protections 1 — Questions and Answers
Question 1: Under the Sarbanes-Oxley Act (SOX), which employees are protected from retaliation for reporting securities fraud?
- Only C-suite executives
- Only external auditors
- Employees of publicly traded companies who report violations in good faith (Correct answer)
- Employees of private companies only
Correct answer: Employees of publicly traded companies who report violations in good faith
SOX Section 806 protects employees of publicly traded companies who report suspected securities fraud in good faith from retaliation by their employers.
Question 2: What is the primary purpose of an anonymous ethics hotline in a compliance program?
- To track employee productivity
- To provide a safe channel for employees to report compliance concerns without fear of retaliation (Correct answer)
- To handle customer complaints
- To communicate policy changes to staff
Correct answer: To provide a safe channel for employees to report compliance concerns without fear of retaliation
An ethics hotline gives employees a confidential and often anonymous channel to report compliance concerns, reducing fear of retaliation and encouraging reporting.
Question 3: Which federal agency administers the whistleblower program under the Dodd-Frank Act?
- Department of Labor (DOL)
- Securities and Exchange Commission (SEC) (Correct answer)
- Department of Justice (DOJ)
- Federal Trade Commission (FTC)
Correct answer: Securities and Exchange Commission (SEC)
The SEC administers the Dodd-Frank whistleblower program, which offers monetary awards and anti-retaliation protections to individuals who report securities law violations.
Question 4: What does 'retaliation' against a whistleblower typically include?
- Providing the employee a performance bonus
- Adverse employment actions such as termination, demotion, or harassment (Correct answer)
- Offering the employee additional compliance training
- Reassigning the employee to a preferred role
Correct answer: Adverse employment actions such as termination, demotion, or harassment
Retaliation against whistleblowers includes adverse employment actions such as firing, demotion, pay reduction, or creating a hostile work environment.
Question 5: What is a 'good faith' report in the context of whistleblower protections?
- A report made for personal financial gain
- A report made with a reasonable belief that a violation has occurred, even if ultimately unproven (Correct answer)
- A report filed only after legal counsel approves it
- A report submitted exclusively to external regulators
Correct answer: A report made with a reasonable belief that a violation has occurred, even if ultimately unproven
A good faith report is one made with a reasonable, honest belief that a violation has occurred, even if the concern turns out to be unfounded after investigation.
Question 6: Which law protects federal government employees who report waste, fraud, or abuse?
- The Sherman Antitrust Act
- The Whistleblower Protection Act (WPA) (Correct answer)
- The Fair Labor Standards Act (FLSA)
- The Employee Retirement Income Security Act (ERISA)
Correct answer: The Whistleblower Protection Act (WPA)
The Whistleblower Protection Act protects federal government employees from retaliation when they report waste, fraud, abuse, or violations of law.
CCM CCM Ethics and Whistleblower Protections 1
Under the Sarbanes-Oxley Act (SOX), which employees are protected from retaliation for reporting securities fraud?